A qualifying statement of sorts to start: while I have been directly involved in the broader media industry for the past several years, it has been primarily from the finance side of the equation, ensuring that at the end of the day there is a sustainable business model. I have dabbled quite a bit in strategic planning and even some creative, but these tangents have certainly been in the minority.
With that said, I am very interested in the incredibly disruptive changes currently taking place across all media platforms, with declining advertising revenue as the main culprit. It is not unlike watching a train wreck in super slow motion!
Print is dying as advertisers are going somewhere else, Canadian Idol just cancelled their show for 2009 due to lukewarm response from sponsors (right on the heels of the most successful season ever), and supposedly online will be the eventual winner once advertisers and their AORs can start to believe in the audience numbers they are being asked to swallow.
The popular sentiment is that we are all going to hell in a hand basket, so fasten your seatbelts and enjoy the ride.
Two strong undercurrents
No prognosticator can be certain what the media world is going to look like in 5 years, especially given how much has changed in the past 12 months, but I am surprised by what I perceive to be 2 very strong undercurrents in the plethora of commentary on this subject.
1. Media as it stands today has to adjust quickly or die! This is much easier said than done. There is considerable infrastructure (manpower and assets) currently invested and deployed, and this type of momentum just does not turn around on a dime. This kind of sensational statement is far too casual for me. A total collapse of the North American media industry would play out like the ABCP fiasco Round 2! Given the fact that the stock markets are already exhibiting a bottoming out as having occurred Nov.30th-ish, I am not convinced that media Armageddon is around the corner.
2. For those practitioners soon to be downsized get busy in something new until the dust settles. Once again, this is much easier said than done. Unless you are independently wealthy, have a successful spouse and can survive on one salary, or are lucky enough to be already funded by a VC, then playing around on Twitter and other interactive forums for the foreseeable future is simply not a viable option.
I agree that the media industry as we have known it will not return, as technology has rendered that predecessor as obsolete. I also agree that this industry will look drastically different in a decade from now. What I take issue with is the pace of transition, unable to contemplate a sudden dramatic about-face that would be too destructive and too much to bare, and for that reason I expect the media industry to migrate to some concessionary position that placates the shareholder base, while also swallowing that big reality pill.
How will the past and future co-exist?
I envision some type of hybrid scenario that marries a bit of the past with the burgeoning future, but allowing some time for a sustainable business model to take shape, and this could last for 5-7 years, sufficient time for a more orderly transition.
Perhaps the big metro dailies really shift their focus to more local or even hyper-local, specialized formats, and stop trying to be all things to all people – too costly and a low ROI going forward. With whatever capital remains, invest in the new paradigm, and avoid smothering it with bureaucratic tendencies instilled over the past 30 years or so.
Quite frankly, I am not sure what this hybrid scenario really looks like, but I am confident that I will probably recognize it when I see it. I will try to put some more thought into this hybrid of mine in Part 2 (coming soon), and welcome any and all points-of-view.
DoreenatDMS says:
January 12, 2009 at 12:44 pmThanks for posting, Guy.
I agree that the (mainstream) media industry as we have known it will not return; although I believe that initially technology played a role in that, as you indicate we are truly well and beyond. To a great degree, I think it’s directly related to the speed with which technology (and the way we embrace it) is advancing these days – much of it happening online within a truly collaborative context. And, yes, that does include “playing around” on Twitter: at the beginning of 2008, Twitter only had about 500,000 unique monthly visitors … but, in 12 months, that number has exploded to over 4.4 million – a phenomenal growth rate of over 750%. Will Twitter maintain that growth? Perhaps. (My gut tells me that we will see more and more conversations in the coming months about monetizing Twitter.)
Ultimately there seems to be no turning back as the power to choose, the power to click, the power to ignore is now fully in the hands of the reader/viewer. This is the paradigm that is being faced by traditional media: not just a technological shift, but a social one as well that goes against the very foundation of traditional media (invented, as Seth Godin once said “to sell ads to you”) … long gone are the days of just “pushing out” content from bloated newsrooms. In this day and (online) age, it seems the prized values – authenticity, sincerity, honesty – must also be a part of any hybrid model.
Jason Preston says:
January 14, 2009 at 12:33 amInteresting thoughts!
The question in my mind is not really whether or not the media world is *willing* to make the “dramatic” changes quickly, but whether or not the market (or economy) is going to *force* dramatic changes.
The sad thing is that when the market forces changes, there is usually a lot of human suffering. I would much prefer a slower, curving trajectory that is led by good management and solid business innovation, but we’ll see what we actually get. Reality is rarely so kind.
Guy Jarvis says:
January 19, 2009 at 2:21 pmThank you for your comments Jason.
‘Willing’ and ‘force’ are certainly some action-packed words! When there is going to be as much human suffering as I expect for the media sector in 2009, politicians inevitably get involved to moderate the market’s natural tendency to find a new equilibrium. Normally I would predict some form of government bailout, but unfortunately for the media sector they are right on the heels of some widely publicized bailout failures for both the auto and financial sectors, and I cannot imagine this discomfort for the North American media conglomerates being a priority for the new administration.
The end result? Probably still too early to tell. I envision some very low key (read weak!) support that can prop up the sector in the short term but under the radar enough to avoid taxpayer backlash. As opposed to outright cheques for working capital which are proving to be good money after bad, the support will likely take the form of financial incentives to encourage the mainstream to quickly evolve into The New Mainstream, which in itself is a dynamic work-in-progress. Basically still a bailout but dressed up to look like job creation.